There are a number of factors affecting succession in the accounting profession. At BOQ Specialist we recognise how each individual practice has its own special considerations.
Assuming you have a succession plan in place (as many businesses do when there are three or more partners), you have a number of options when the time comes to move on.
Outright or partial sale offers a relatively fast solution but this may mean accepting a reduced price or onerous conditions based on performance and client retention rates. The expected timeframe for completion in this model is around 1-3 years from signing a contract.
Mergers can be difficult to arrange and require many elements of the two businesses aligning, including staff and culture. If the merger is not with a substantially larger firm, then succession is merely deferred. The expected timeframe for completion in this model is around 1-5 years from signing a contract.
Promoting from within offers good value simply due to the reduced risk of the successor already having an understanding of the business they are buying into and relationships with many of the clients. Transition is executed smoothly and the personal relationship between the retiree and the successor is maintained. Providing the exiting owner has planned sufficiently in advance and has chosen the appropriate candidate the expected timeframe is around 1-2 years from initial discussions.
Consolidation is also a popular model. This often occurs in larger businesses when the economy and the listed market are performing well. With current market conditions in Australia, it is expected this won’t be a viable option for quite some time to come. The expected timeframe for this model is around 1-5 years from signing a contract.
BOQ Specialist has successfully assisted a number of firms with their succession plans. By taking a different approach to traditional finance providers, we are able to offer creative alternatives for our clients. For example, we can advance up to 100% of the goodwill funding required by firms that have three or more partners and a stable track record. Additionally, in most cases BOQ Specialist can lend against the business equity of a partner with no additional security or guarantees from the other partners.
Talk to a financial specialist today on 1300 131 141 about your succession plans.